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The canary in the Fed’s coal mine

Investor Daily

The legendary investor Warren Buffett once said that it is only when the tide goes out that it is revealed who has been swimming naked. We think this aphorism is particularly apt when considering the US Federal Reserve’s (Fed) quantitative tightening (QT) program. There has been a range of developments in recent weeks that suggest that the first of the skinny-dippers are being exposed. In short, notwithstanding ongoing geopolitical concerns and trade uncertainties, we believe that the relatively modest reduction in the size of the Fed balance sheet is influencing markets as disparate as emerging market currencies and global bank equities. READ ARTICLE IN FULL